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Public registers across the EU: the time is right, the time is now

Registros públicos en la UE: el momento es hoy

Robin Hodess|

After years of public scandal, investigative journalism, and policy research to back it all up with evidence, there is significant demand and momentum to put an end to anonymous companies once and for all. The case has repeatedly been made why this is critical by and for governments, business and civil society, with a particular focus on combating money laundering and combating terrorist financing, and there has been a substantial shift of international norms as a result.

One important policy tool to stop secrecy around company ownership is public registers of beneficial ownership. Why do we need them, when most countries already have company registers? Beneficial ownership registers provide information on those individuals who ultimately control and benefit from a company, and go beyond the legal persons that may be listed as owners. This gives insight into potential collusion, conflicts of interest, money laundering, and so on – and conversely creates the transparency that helps investors and markets alike, while also adding to corporate accountability and public trust.

The G20 has been promoting its own implementation of High-Level Principles on Beneficial Ownership Transparency since 2014. Yet in the past few years, several countries – including some within OGP – have stepped up and moved faster than most G20 countries, perhaps with the exception of the United Kingdom, which leads in this field. Substantial progress on beneficial ownership transparency has been made in Ukraine and Slovakia, and credible commitments have also come from countries such as Kenya and Ghana. In addition, the 2016 Extractive Industries Transparency Initiative standard also requires all of its more than 50 EITI compliant countries to implement public reporting of beneficial ownership by extractive companies by 2020. Most recently, in 2018, the EU has upped the pace with its adoption of the Fifth Anti-Money Laundering Directive (AMLD 5), requiring all EU members states to produce public registers of beneficial ownership by the end of 2019.

What does this mean for EU states? Put bluntly: it is time to get cracking on implementing beneficial ownership transparency. One way is to make this part of Open Government Partnership work. To encourage this, members of the OGP Steering Committee’s civil society caucus (Helen Darbishire of Open Access Europe, Zuzana Wienk of Fair Play Alliance, and myself) have written a call for action, requesting OGP members to adopt ambitious commitments to implement beneficial ownership transparency as part of the next action plan cycle.

More than 80 organisations joined the call to action, signing the letter showing significant national and international support to the implementation of AMLDV provisions via the OGP action plan process.

What does ambitious look like within implementation? Given that we see beneficial ownership transparency as a crucial commitment to OGP, part of the answer is that registers would not only provide data that is publicly available but freely accessible, provided in open data formats that can be used by all.

Implementing beneficial ownership transparency via the OGP process has several advantages. For one, the process of setting ambition will be collaborative, via OGP co-creation. This will increase ownership of public registers as a practical solution and help gain momentum for the process by which to achieve them. It will also ensure that registers meet stakeholder needs. If OGP becomes a means for European Union member-states to implement beneficial ownership transparency, OGP will be able to support swift peer to peer learning across these experiences, with knock-on benefits for the entire Partnership.

In 2018, we can make tangible progress on ending anonymous companies in Europe by enshrining commitments to beneficial ownership in OGP. If we can achieve this at scale, we will provide the next wave of practical efforts to stop these ‘runaway cars for corruption’ that harm markets and often result in impunity. Moreover, we will be a big step closer to the kind of open government practices that OGP was set up to promote, making government and companies more accountable to society. Let’s go Europe: you are at bat!

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